December 3rd, 2024 | 07:00 CET
Coinbase, Desert Gold Ventures, MicroStrategy – On to new records
Donald Trump's transformation from crypto skeptic to unconditional supporter boosted digital currencies after his election and brought Bitcoin close to the USD 100,000 mark. In contrast, precious metals lost ground following his election victory but have already regained their lost territory. While the gold price remains close to its historic highs, promising producers and exploration companies are far from record levels, offering substantial long-term catch-up potential.
time to read: 4 minutes
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Author:
Stefan Feulner
ISIN:
Coinbase | US19260Q1076 , DESERT GOLD VENTURES | CA25039N4084 , MICROSTRATEG.A NEW DL-001 | US5949724083
Table of contents:
"[...] As we look at four or more zones in more detail from the beginning, investors can expect a continuous news flow that will underscore our vision of the Holy Grail project as a giant opportunity. [...]" Nick Luksha, President, Prospect Ridge Resources
Author
Stefan Feulner
The native Franconian has more than 20 years of stock exchange experience and a broadly diversified network.
He is passionate about analyzing a wide variety of business models and investigating new trends.
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MicroStrategy – The hottest bet in the crypto market
The share price performance of this company, which was originally founded as a software manufacturer, is reminiscent of the good times of the German Neuer Markt at the turn of the millennium. Although already hopelessly overpriced, investors pounced on the stock, causing parabolic price movements. A similar pattern is now seen with the Virginia-based company led by a Bitcoin enthusiast. When comparing MicroStrategy's current Bitcoin holdings in relation to its market capitalization, the Company valuation is overpriced by a factor of 2.375, even at an adjusted share price of USD 387. Whether or not a correction will occur now depends largely on the performance of Bitcoin.
MicroStrategy's capital-raising strategy, which is based on the issuance of convertible bonds and shares, could well become a bottomless pit in the future. The Company issues bonds that either carry low interest rates or no interest rates at all. Instead, potential investors, particularly institutional investors, are attracted by the opportunity to convert these bonds into company shares if the share price rises.
The proceeds from the sale of these bonds are used by the Company to acquire more Bitcoins, further driving up MicroStrategy's stock price. Over the next three years, Michael Saylor's team plans to spend USD 42 billion buying bitcoins. However, they have no intention of ever selling the virtual currencies. Watch out! The stock market has never been a one-way street!
Desert Gold Ventures – Excellent drilling results
After the first sell-offs following Trump's election, the situation for precious metals has eased significantly. After reaching a high of USD 2,790 per ounce, the gold price reduced its overbought situation and, after an interim low of USD 2,536, moved north again. The trend-following indicator MACD gave the yellow metal a tailwind with another buy signal, and the RSI is also turning upwards in the neutral range.
Experts assume that the next wave could already hit the target zone at USD 3,000 per ounce. At the latest here, smaller gold producers and exploration companies such as Desert Gold Ventures should benefit in particular. The Canadians have collected several arguments in favor of a significantly higher share price in recent months, which is currently at CAD 0.07.
Desert Gold Ventures, led by an experienced management team under CEO Jared Scharf, owns the 440 km2 SMSZ project in Mali, located along a 38 km stretch of the productive Senegal-Mali Shear Zone in West Africa.
In the immediate vicinity are four category-one gold mines, including B2 Gold's Fekola mine, Barrick's Gounkoto and Loulo mines, and Allied Gold's Sadiola and Yatela mines. With more than 20 open-ended gold zones discovered to date that remain to be further investigated and numerous targets yet to be tested, the SMSZ project has the potential for the discovery of one or more large gold deposits comparable to the Stage 1 gold mines in the region.
So far, 1.1 million ounces of gold have been identified near the surface. The results of the Phase 2 drilling program, which was conducted in the second quarter of 2024, have now been released. At the SMSZ project in Mali in West Africa, exploration drill holes totaling 3,892 m in 65 drill holes were drilled.
According to Jared Scharf, these results bring the exploration target a big step closer to breaking the 2 million-ounce gold mineral resource mark. At the beginning of 2025, the results of the Preliminary Economic Assessment (PEA) will be published. If this doubling of the mineral resource proves true, Desert Gold's shares should also make a significant leap on the stock exchange and pulverize the current market capitalization of around CAD 18 million.
Coinbase – Caution advised
While the Bitcoin price continues to trade near the psychologically important USD 100,000 mark, shares of companies such as Coinbase, Riot Platforms and MARA Holdings are finding it difficult to maintain their upward momentum. At the end of last week, for example, the crypto exchange Coinbase saw major sell-offs, with the stock closing down almost 5% at USD 296.20.
After the high of USD 341.75 on November 20, there was an initial minor correction to the area of USD 288.55. Coinbase was only able to participate to a limited extent in Bitcoin's subsequent upward movement, up to the area of USD 315, before another sell-off occurred. Should the value fall below the USD 288.50 mark again, there is a risk of an initial downward push until the first price gap closes at USD 273.49. If the underlying instrument takes a deeper breath, Coinbase may not be immune to falling into the USD 200 range. After Donald Trump's victory, an initial upward gap at USD 193.96 was opened here.
CEO Brian Armstrong took advantage of the rally in Coinbase shares of over 980% in the past almost 2 years to make a tidy sum in November. The Company leader sold shares worth around USD 585.60 million.
Even after the brief and sharp correction, MicroStrategy's shares are significantly overvalued compared to Bitcoin. Coinbase is losing momentum despite rising Bitcoin prices. Desert Gold Ventures reported excellent drilling results and is preparing the PEA for the beginning of next year.
Conflict of interest
Pursuant to §85 of the German Securities Trading Act (WpHG), we point out that Apaton Finance GmbH as well as partners, authors or employees of Apaton Finance GmbH (hereinafter referred to as "Relevant Persons") may hold shares or other financial instruments of the aforementioned companies in the future or may bet on rising or falling prices and thus a conflict of interest may arise in the future. The Relevant Persons reserve the right to buy or sell shares or other financial instruments of the Company at any time (hereinafter each a "Transaction"). Transactions may, under certain circumstances, influence the respective price of the shares or other financial instruments of the Company.
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